An hour before the close of trading, the Standard & Poor's 500 list was up 11.35 at 826.97, and the NYSE composite index was up 5.09 at 430.04.

The Nasdaq composite index was up 11.49 to 1,334.40, and the American Stock Exchange composite index was up 3.04 at 573.54.

IBM was up 6-1/8 at 168-1/4 at the Dow's biggest gainer, benefiting from a brokerage upgrade and Wednesday's upbeat presentation to industry analysts by company chairman Louis Gerstner.

Elsewhere in the technology sector, computer-networking shares continued to rally. In active Nasdaq trading, Cisco Systems was up 2-3/8 at 61-1/8, and 3Com was up 1" at 38".

Bond prices initially fell this morning, boosting the yield on the 30-year Treasury to 6.99 percent. But as bonds recovered, the long-bond yield - a key determinant of borrowing costs - fell to 6.91 percent.

On Wednesday, stocks fell sharply as the yield rose to 6.96 percent amid some unsettling reminders of the inflation concerns that so recently plagued the market. Notably, the Federal Reserve issued a report saying there were new signs of upward wage pressures - the leading force behind inflation - as labor markets remained tight in April.

Stocks and bonds plunged in the early spring after the Fed raised one of the central bank's key lending rates, hoping to ease inflationary pressures by slowing the pace of borrowing and spending.

But the markets sprang back to life last week amid indications that employment costs have remained under control, bolstering arguments that the Fed won't need to raise rates repeatedly, choking company profits.

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Thursday, the Labor Department reported that the number of first-time claims for jobless benefits was unchanged from last week as strikes and flooding kept the tally at a four-month high of 347,000 new applications. Many analysts had forecast a drop of about 19,000.

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